Construction

Carillion looks for Middle East PPP deals

British building support services company looks for new work after Oman deal

Carillion

The British building support services company Carillion says it is looking for new public private partnerships in the Middle East after signing initial PPP agreement in Oman.

The company is turning its focus this year to winning new business in the Middle East, especially the UAE ahead of the Expo 2020, as it played down the impact of the UK vote to leave the European Union.

Carillion said in its half–year trading update that its Middle East construction services business “continues to perform in line with our full-year expectations” despite a likely dip in the first six months of the year. This was due to a one-off £14 million profit boost in the first half of 2015 due to a reorganisation of staff accommodation in Oman.

“To mitigate the impact of this and of the prolonged low oil price on the pace of customer investment programmes in the full year, we continue to pursue our disciplined strategy of strict contract selectivity with a strong focus on winning contracts with the support of UK Export Finance,” the firm said.

“Over the medium term, we are also pursuing PPP opportunities, notably in Oman, where we have signed a Memorandum of Understanding with the Oman Investment Fund to develop a PPP programme in the health sector.”

The company said its new business has “remained strong”, with first-half orders and probable orders worth approximately £2.5 billion, including a £240 million, 4.5-year support services contract for Petroleum Development Oman.

“Overall, we continue to believe that the outlook for our support services activities remains positive, driven by the demand for infrastructure services and the continued outsourcing of facilities management in the UK, supported by a good pipeline of opportunities in Canada and the Middle East,” it said.

Carillion derives less than 5% of its revenue from the UK housing market, limiting its exposure to the country’s vote to leave the European Union, Reuters reported its CEO Richard Howson as saying.

Carillion’s focus this year would be to win new business in the Middle East, especially the UAE ahead of the Expo 2020, Howson is reported as saying.

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